1. Thinking Mathematically Consumer Mathematics and Financial Management 8.2 Simple Interest

2. Calculating Simple Interest Interest =(principal)(rate)(time) I = Prt The rate, r, is expressed as a decimal when calculating simple interest. Exercise Set 8.2 #5 P = $5000, r = 8.5%, t = 9 months, find the simple interest.

3. Future Value Future value (A) – amount due at the end of a loan Present value (P) – the principal borrowed A = P(1 + rt) Exercise Set 8.2 #11, 15, 21 P = $26,000, r = 9.5%, t = 5 years, find the future value. P = $2000, A = $2150, t = 1 year, what is the interest rate? A = $6000, r = 8%, t = 2 years, what must the initial principal be?

4. Discounted Loan Interest is deducted up front the loan amount

5. Thinking Mathematically Consumer Mathematics and Financial Management 8.2 Simple Interest